Councilman seeks way to keep small stores in business

Posted
Sunday, November 4, 2018 12:05 am

The shopping strip on Knolls Crescent in Spuyten Duyvil has been plagued by long-term vacancies. Councilman Ydanis Rodriguez heralded the Small Business Jobs Survival Act — which he introduced last March — claiming it will alleviate stress on small businesses to relocate their storefronts by establishing fair and due process in negotiating lease agreements.

JULIUS CONSTANTINE MOTAL

Yetta Lazri, owner of A Touch of Sun Hair and Spa in a quiet pocket of Spuyten Duyvil, blow-dries a customer’s hair. Lazri feels that business on the Knolls Crescent shopping strip has suffered after the closure of neighboring Kappock Cafe and Wine Bar last July. ‘It’s like a ghost town now,’ Lazri says.

JULIUS CONSTANTINE MOTAL

A pedestrian walks past a pair of shuttered storefronts on Knolls Crescent, which has suffered from long-term vacancies. Landlord Friedland Properties is known for leaving stores empty until they nab the ideal tenant willing to pay the price they’re seeking. Councilman Ydanis Rodriguez introduced a bill last March to reduce vacancies citywide, a ‘crisis’ he’s compared to the city’s mass transit troubles.

JULIUS CONSTANTINE MOTAL

Despite around a third of Knolls Crescent’s storefronts remaining vacant, businesses like Yetta Lazri’s A Touch of Sun Hair and Spa keep the strip alive. Councilman Ydanis Rodriguez introduced a bill last March aiming to establish fair and due process in lease renewal negotiations to address what he’s called a citywide vacancy crisis.

JULIUS CONSTANTINE MOTAL

Councilman Ydanis Rodriguez speaks with a constituent in 2015. Discussions began Oct. 22 on the Small Business Jobs Survival Act Rodriguez introduced last March, which aims to reduce a growing number of vacancies citywide by encouraging property owners and businesses to ‘act honestly’ and ‘engage fairly’ when negotiating a lease renewal.

ADRIAN FUSSELL / File

Back from the brink

The city council began discussions on the Small Business Jobs Survival Act Oct. 22 while hundreds rallied outside. It was the first hearing in years on a measure that’s been floating around in the council for three decades, but never passed.

But now Councilman Ydanis Rodriguez says his bill, introduced last March, is gaining momentum with the support of more than 20 council members as well as the public advocate.

“We are experiencing a crisis within the local business community,” Rodriguez said in a statement. “The council must look at this issue because we see blocks of vacant storefronts across our city.”

The bill’s current iteration would require owners of nonresidential spaces to notify tenants three months before their lease expires, at which point tenants who haven’t breached the lease or broken the law would generally be guaranteed leases up to another 10 years.

An arbitrator would look at paperwork from both sides if negotiations stalled and could hire consultants to analyze and preview the space before proposing a lease.

If the arbitrator’s arrangement isn’t amenable, the tenant would be allowed to stay in the space paying 10 percent more in rent until the landlord finds another occupant, at which point the landlord would need to offer the same terms to the original tenant before sealing a deal with the new one.

Providing more advanced notice, a property owner could cut ties with the tenant company, plan to demolish the space, or even move their own business operation into it.

The goal of the bill, Rodriguez said, is to “protect small businesses, address the large number of storefront vacancies,” and “give property owners clarity in fair lease negotiations.”

— Zak Kostro

By ZAK KOSTRO

Running a beauty salon in a small shopping strip where around a third of the stores are vacant hasn’t made Yetta Lazri’s life easier.

“It’s gotten worse,” since the neighborhood’s beloved Kappock Cafe and Wine Bar on the now desolate stretch of Knolls Crescent shuttered last July, meaning one less reason to visit the already quiet nook of Spuyten Duyvil.

“It’s like a ghost town now,” Lazri said over the din of blow dryers in her Touch of Sun Hair and Spa. “It’s depressing. It’s very dead. For people who live here, for the businesses, it’s very bad.”

Lazri’s landlord, Friedland Properties — notorious for its strategy of leaving stores vacant until they snag the tenant and rent they want — owns several other vacant stores on her strip, including the defunct cafe, as well as long-gone Knolls Cleaners and Tiffany Nail. A representative of the company refused to comment.

Now, a local lawmaker wants to stem small business deaths ravaging a city marred by vacancies. Around a fifth of Manhattan’s commercial storefronts remain empty, up from roughly 7 percent since 2016, The New York Times reported, citing real estate firm Douglas Elliman.

Councilman Ydanis Rodriguez heralded the Small Business Jobs Survival Act — which he introduced last March — as a solution to the city’s small business “crisis” — one he’s said is in league with the city’s transit woes. Rodriguez claims the bill will alleviate stress on small businesses to relocate their storefronts by establishing fair and due process in lease renewal negotiations.

City council held its first hearing on the measure in years on Oct. 22, while hundreds rallied outside City Hall urging Mayor Bill de Blasio and city council Speaker Corey Johnson to back it, according to published reports.

The legislation aims to reduce a growing number of vacancies citywide by encouraging both parties — property and small business owners — to “act honestly” and “engage fairly” when negotiating a commercial lease, Rodriguez said in a statement. It would establish regulations on security deposits, landlord retaliation and conditions that would prompt arbitration.

The bill “is not commercial rent control,” Rodriguez said. Rather, it “gives both parties more clarity and rights in the lease renewal process.”

While the bill has gained support from some small business owners and more than 20 council members, Mayor Bill de Blasio’s administration warned the measure could pose several legal issues and might make matters worse.

The city supports efforts to help small business owners secure a fair lease, said Jane Meyer, a spokeswoman for the mayor. In fact, the city’s small business services department launched a program last year to provide free legal assistance to tenants in lease negotiations.

Landlords and big chains could have an advantage under the bill because they’d have means to hire consultants and present more compelling testimony to arbitrators, Gregg Bishop, commissioner for the city’s small business services department, said in testimony in front of the council.

“Though this legislation attempts to create a system to provide fair lease renewal terms, it is important to note it does not guarantee favorable terms for the tenant,” Bishop said. “The party that makes the strongest case — often the party with the best resources — is likely to have a more favorable outcome.”

Furthermore, the arbitration and negotiations the measure calls for would impede deals, hurting both owners and tenants, said John Banks, president of the Real Estate Board of New York, a trade group that represents developers and landlords.

“We are vehemently opposed” to the legislation, Banks said in testimony, “which will do nothing to solve the underlying issues behind storefront vacancies, and instead would have a catastrophic impact on our local economy.”

While Councilman Andrew Cohen is “profoundly concerned” about vacancies plaguing his district, he’s not sure this bill is the answer.

“I support a vacancy tax, which I really think gets to the heart of the problem,” Cohen said. “I don’t want vacant stores.”

But as he sees it, the legislation focuses more on preserving existing businesses.

“I’m not sure that that’s in the best interest of the community,” Cohen said. “Having a dynamic marketplace makes sense to me — to have new businesses come in that bring new services that reflect the community as it is currently, not how it was 10 or 15 or 20 years ago.”

In general, Cohen would like to see the de Blasio administration do more to address vacancies citywide.

“The administration is sort of nibbling on the edges in offering support to small businesses, making services available,” Cohen said. “But I don’t think they’ve done enough. I don’t think they’ve come up with a plan.”

Lazri knows little about the bill, but wishes the city offered her more support standing up to powerful landlords like Friedland.

“As a business owner, we have no rights,” Lazri said. “The city “take(s) taxes every month, but when it’s time for our rights and what we need, no door was ever opened for us.”

But other than collecting taxes, Lazri’s not really sure what the city does to better her prospects, and believes other business owners would agree.

“It’s not just about the landlord,” Lazri said. “It’s about somebody helping you as a business. Clients come, they’re happy, we’re happy. But we need support from the city.”

Although discussions on the bill began last week, Rodriguez wants to move to a vote as soon as possible.

“Local small businesses are the backbone of our economy,” he said. “This crisis hasn’t happened overnight. We’re against the clock. This bill has been debated over and over. It’s time for us to implement it and bring light to a problem that’s affecting our whole city.”